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India – the world’s second largest cotton exporter has banned cotton export with immediate effect, opening new corridors for Pakistani exporters to fetch orders for some half a million bales from international market.

Exporters told Business Recorder on Monday that Pakistan will not be directly affected with this move as there were a few deals with Indian exporters this year owing to better cotton crop in the country.However, with this ban, Pakistan can get more benefits, as this year the country produced a record crop of over 14 million bales and prices in the domestic market are on decline because of slow demand and bumper cotton crop, they added.

On March 5, Indian authorities suddenly announced ban on cotton export with immediate effect to support the local textile industry.

Director General Foreign Trade (DGFT) India has issued official notification No 102(RE-2010)/2009-14 for restrictions with an immediate effect.

Now the cotton export from India will be completely stopped.Following the notification, export of cotton {ITC (HC) codes 5201 and 5203} has been prohibited till further orders. Transitional arrangements will not be applicable for the export of cotton and export of cotton against registration certificates already issued will also not be allowed, according to notification issued by DGFT India.India has imposed ban to protect its local industry, which was expected to suffer huge losses in case of further export from India.

This is the second consecutive year when the Indian government imposed a sudden ban on cotton export, said Pakistani traders.”This move favours Pakistan as we can get many advantages as China and other countries have massive cotton demand of cotton and Pakistan can be good alternative to India,” said Ghulam Rabbani, a leading trader and former director Karachi Cotton Association.

This year Pakistan has a high quality bumper cotton crop because of sowing of BT cotton across the country, he added.During the current season, so far Pakistan has produced 14.37 million bales till February 2012 compared with 11.5 million bales in the same period of last year, depicting an increase of 2.87 million, Rabbani said.

“Presently, approximately 17 million bales (including 2.1 million of carryover stock) of cotton is available in the domestic market, while, the local consumption stands at 14.4 million bales, which means we have about two million of bales in excess…which can be exported,” he said.Before the Indian ban, China and other countries were focusing India for cotton import, however with recent move of the Indian authorities, Pakistan can get new half a million bales export orders as currently the country has additional cotton and a free trade policy, Rabbani said.

The government of Pakistan has already allowed free trade of cotton, he added.

Talking about cotton deals with India, he said this year there were a few cotton import deals and the move will not hurt Pakistan.